Behind the Rising Dissatisfaction with Obama's Economic Policies

Jun. 24, 2009 11:12 AM ET

Pres. Obama's economic policies have been a MASSIVE disappointment, especially for those of us who voted for him. It is no wonder that one sees a decline in public support for these policies in recent public polls. The reason: So far, he has out-Bushed Bush.

Indeed, you would be hard pressed to see a difference in his initiatives and what a McCain presidency might have introduced. This is not "change we can believe in." It is cynical political gamesmanship to create the appearance of doing something, but actually only papering over critical structural weaknesses in our economy, especially the financial sector. Obama's election couldn't have suited the financial sector better. If McCain had been elected and pursued these policies, he would have been crucified by the MSM, the public, and especially bloggers.

When one totes up the financial commitments of the USG, including the Fed, made in the name of addressing the recession, one finds that funding for Wall Street outdistances aid to Main Street by 3:1--more than $9 trillion of taxpayer money to the banksters, some $3 trillion to business (ex-auto industry) and families that comprise the other 300 million of us. Thank you Mssrs. Bernanke, Summers, and Geithner--you tools of of the financial sector.

More Americans are unemployed now (with record numbers falling off the far end of unemployment compensation to even more minimal welfare) than ever in US history, including the Great Depression. The unemployment rate is approaching double digits and, within the last week, the White House has finally recognized this inevitability. This after both the White House in its stimulus planning and the Treasury in its "adverse scenario" projected the maximum unemployment rate at under 9% less than six months ago. And all that is U3--the narrow definition of unemployment--not U6 now approaching 20% which more accurately reflects the truly desperate state of the American workforce.

At the same time, because this workforce isn't working, has lost a substantial portion of its wealth in the finance-driven real estate market fiasco, and is up to its neck in debt, the retail industry--goods & services--is suffering substantially. Moreover, the banks won't lend needed capital even to the well-performing ones because they might perform poorly in the future and the banks themselves are simply financial zombies, still leveraged well beyond the hilt at some 30:1. An American economy driven by consumption as it has been in the past is and well remain a thing of the past.

OTOH, besides the many trillions of dollars in financial commitments made to the financial sector, now the Administration has introduced new regulations that, like most of Pres. Obama's speeches, sound really good, but actually amount to little. None of the business behaviors that led to the current crisis--excessive leverage, unregulated CDSs, bought credit ratings, usurious consumer credit policies, misguided executive incentives--will be prevented by the proposed regulations, and in some cases they will have absolutely no effect at all--no matter what agency regulates the financial sector.

It is no wonder that the American public is disenchanted with the Obama administration's economic policies. The wonder is that it has the support that it still has.